Case 285 - Driving to Discord: U.S.- Japan Auto and Auto Parts Dispute, 1993-1995

Elms, Deborah

In the summer of 1995, the United States and Japan came as close as they have ever come to a full-scale trade war over increased market access for U.S. autos and auto parts. The United States had threatened, under an American trade law called Section 301, to impose sanctions worth nearly $6 billion on luxury automobiles imported from Japan if a satisfactory agreement could not be reached. Japan responded by bringing a complaint against the United States in the World Trade Organization (WTO).  The net result would have been a direct loss of bilateral trade worth over $10 billion. This case study recounts the torturous path to a final agreement, reached literally minutes before the Section 301 sanctions would have gone into effect.